Dixon v Kingsley
| Jurisdiction | New Zealand |
| Judge | The Hon Justice Kós |
| Judgment Date | 27 August 2015 |
| Neutral Citation | [2015] NZHC 2044 |
| Docket Number | CIV-2015-404-1350 |
| Court | High Court |
| Date | 27 August 2015 |
CIV-2015-404-1350
IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
Appeal against a refusal by the Family Court (FC) to order discovery in relationship property proceedings — appellant sought particular discovery against the respondent and non-parties in relation to transactions in the company accounts, including payment of legal fees, an employment dispute that resulted in the purchase of shareholdings by the respondent after the parties had separated and details of a tender won by the company that appeared to increase the value of its shares — FC had refused discovery of some items because of the privacy concerns of the interested parties and privilege under to s54 Evidence Act 2006 (Privilege for communications with legal advisers) — what were the principles governing discovery in the FC — whether the privacy interests of non-parties justified limiting discovery — whether, applying the principles, the material should be disclosed.
K A Muir for Appellant
D T Chambers QC for Respondent
JUDGMENT OF The Hon Justice Kós
What principles govern documentary discovery in relationship property cases in the Family Court “How should those principles be applied” Those are the primary questions in this appeal.
The parties were formerly husband and wife. They married in 1994, but separated in April 2012. The major item of relationship property in issue is shares held by Ms Kingsley in a company. 1
Ms Kingsley held 30 per cent of the company's shares at the time of separation. She concedes those shares are relationship property. But on 30 July 2012 she acquired a further 10 per cent shareholding from three departing shareholder/employees. The status of these shares is in issue.
Relationship property proceedings were filed in the Family Court in 2013. In February 2015 Mr Dixon filed an application for particular discovery against Ms Kingsley and non-parties (including the company). In particular he sought discovery relating to employment issues in 2012 between the company and the three shareholder/employees, documents concerning changes to the current account balances of shareholders in the company since 1 January 2012, bank statements evidencing accounts into which dividends were paid or funds credited from Ms Kingsley's current account or paid to Ms Kingsley or an associated company, and documents connected with a successful tender by the company awarded in June 2012.
As will become apparent in reasons that follow, Judge D A Burns either declined to grant this discovery, or granted it on a more restrictive basis than Mr Dixon had sought.
At the commencement of the hearing before the Judge in April, counsel for Mr Dixon addressed the Court on anonymisation of parties' names. This was to protect the parties' two children and for other privacy reasons including commercial sensitivity. An earlier decision of the Court on interim maintenance had been anonymised using the names “Jake Dixon” and “Carol Kingsley”. The Judge indicated that his decision would be anonymised. He said he was likely to issue a draft and allow the parties to propose redactions.
Judge Burns' decision was issued in May. It was not anonymised. The omission was taken up by counsel for Mr Dixon. Judge Burns then issued a minute. It notes that a request had been made in Court to anonymise the judgment – and that it had been granted. The Judge invited counsel to submit a redacted version for approval. It is unclear whether that invitation was taken up.
Counsel for Mr Dixon submitted his synopsis of appeal submissions in this Court using the same intituling, “ Jake Dixon v Carol Kingsley”. In a letter to the Registrar he asked that the Family Court's approach to anonymisation be followed. The case was listed accordingly. A copy of his letter to the Registrar was sent to counsel for the respondent. There was no discussion between counsel about this matter before the hearing.
In the High Court counsel for Ms Kingsley appeared, opposed anonymisation and the making of any confidentiality orders (other than as to the identity of the two children), and presented me with written submissions on the point (together with a copy of the decision of Stevens J in Sanders v Sanders). 2
Judge Burns had made a direction as to anonymity. No apparent issue was taken with that course in the Family Court. No appeal from that order was advanced before me. I am not bound to follow that order in this Court. But the parties might reasonably expect it to continue unless the issue were raised in advance of the hearing. It was not. I am left with the uncomfortable sense that a change of stance by the respondent was adopted for extra-curial, tactical purposes.
I will not therefore differ from the approach taken by the Judge. This judgment is anonymised accordingly. A confidentiality order is made at [67].
The discovery regime in the Family Court is now seriously outdated and capable of working injustice. Peruvian Guano holds court there still. 3 In the High Court it was shovelled out the door in 2012.
Family Court Rule 141(1) provides:
141 Order for discovery after proceedings commenced
(1) If a notice of defence or a notice of intention to appear has been filed, a party may apply to the Court for an order for discovery of documents—
(a) that are, or have been, in the possession of another party to the proceedings; and
(b) that relate to a matter in question in the proceedings.
The power to make an order, in r 141(2)A is similarly broad: the Court may order a party to file an affidavit stating “whether certain documents or classes of documents are or have been in that party's possession, custody or power”.
This is nothing more than the Peruvian Guano “train of inquiry” rule in statutory form. That is, documents must be discovered which may directly or indirectly enable a party to advance his or her own case or to damage the case for his or her adversary. 4 This rule was developed in the days before electronic communications and copying, and the digital transmission and retention of endless marginally relevant ephemera.
Relationship property is an area notorious for efforts by a wealthier or better informed spouse to confine access to information by the poorer or more poorly informed spouse. Rigour is necessary. But so is realism. The relevant purpose of the Property (Relationships) Act 1976 is to provide for a just division of relationship property. 5 The relevant principle of the same Act is that “questions arising under this Act about relationship property should be resolved as inexpensively, simply and speedily as is consistent with justice”. 6 The untailored application of the Peruvian Guano discovery rule under r 141 is inconsistent with both purpose and principle.
Wide-ranging discovery obligations, with associated opportunity for interlocutory wrangling, interlocutory applications and appeals, create a substantial risk of injustice by precluding or limiting access to civil justice. Peruvian Guano-type obligations may be entirely inappropriate where the assets available are limited.
In the High Court, and reflecting those sorts of considerations, reforms were made in February 2012. Initial disclosure must be given alongside pleadings. 7 Counsel must attempt to agree an appropriate discovery order prior to the first case management conference. 8 Two forms of discovery order may be made: standard or tailored. The former is narrower than the previous Peruvian Guano test. It is based on United Kingdom, Australian and Canadian reforms. The scope of disclosure is
So far these reforms have passed the Family Court by. But the very breadth of r 141(1) and the discretion imported by r 141(2A) – “the Court may order” – does permit closer inquiry by the Family Court (and by this Court on appeal) into the scope of discovery that should be ordered. By no means does it follow that broad relevance-based Peruvian Guano-type discovery should be ordered (or sustained on appeal). A tailored approach is both permissible and desirable.
The leading decision of this Court on discovery under the Property (Relationships) Act 1976 and r 141 is J v P. 11 Three qualifying principles for discovery in these cases were identified: relevance to the issues in the proceeding, reasonable necessity, and that discovery should not be unduly onerous.
In my view the following are the essential principles governing discovery in relationship property litigation:
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(a) A robust approach should be taken to discovery consistent with the purposes and principles of the Act: the need for just division, but also inexpensive and efficient access to justice.
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(b) Such discovery must not be unduly onerous.
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(c) Such discovery must be reasonably necessary at the time sought.
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(d) The scope of discovery should therefore be tailored to the need of the Court to dispose, justly and efficiently, of relationship property issues under the Act.
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(e) More...
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Fisher v Fisher
...discovery. 6 13 Since Judge Burns made his decision, the parties and their counsel have had the benefit of KÓS J's judgment in Dixon v Kingsley. 7 In that judgment, his Honour referred to the way the Peruvian Guano approach to discovery had been “shovelled out the door in 2012”, as far as t......
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Fisher v Fisher
...any, orders for 2 3 4 5 May v May [1982] 1 NZFLR 165 at [170]. Family Court Rules 2002, r 141(2A). Rules 141(3) and 16. Dixon v Kingsley [2015] NZHC 2044. Property (Relationships) Act 1976, s discovery should be made or whether the proceedings should be transferred to the High Court. It is ......
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Dixon v Kingsley
...CONFIDENTIALITY ORDER MADE AT [67] IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2015-404-1350 [2015] NZHC 2044 BETWEEN JAKE DIXON Appellant AND CAROL KINGSLEY Respondent Hearing: 3 August 2015 Counsel: K A Muir for Appellant D T Chambers QC for Respondent Judgment: 27 August 2015 ......